Proposal for a Council Implementing Decision amending Implementing Decision 2011/344/EU on granting Union financial assistance to Portugal

Upon a request by Portugal, the Council granted financial assistance to Portugal on 17 May 2011 (Council Implementing Decision 2011/344/EU) in support of a strong economic and reform programme aiming at restoring confidence, enabling the return of the economy to sustainable growth, and safeguarding financial stability in Portugal, the euro area and the EU.

In line with Article 3(9) of Decision 2011/344/EU, the Commission, together with the IMF and in liaison with the ECB, has conducted the seventh review to assess the progress on the implementation of the agreed measures as well as their effectiveness and economic and social impact.

Taking into account the recent economic, fiscal and financial developments and policy actions, the Commission considers that some changes to the economic policy conditions underpinning the assistance are necessary to secure the programme's objectives, as explained in the recitals of the proposed amendments to the Council Implementing Decision.

Moreover, in line with the statement by the Eurogroup and Ecofin Ministers of 12 April 2013, with a view to smoothing the debt redemption profile and lowering the refinancing needs in the post-programme years the Council Implementing Decision should be amended with a view to extending the average maturity of the overall facility from “up to 12.5 years” to “up to 19.5 years” through the maturity extension of the individual disbursements.

At the request of Portugal and market conditions permitting, the Commission may refinance all or part of its initial borrowing in order to extend the maturity of an instalment or a tranche, provided that the maximum average maturity of 19.5 years is respected. Any amounts borrowed by the Commission in advance shall be kept on an account with the ECB that the Commission has opened for the administration of the financial assistance. The Commission will also make sure that the maturity at which the refinancing operations are made caters for the proper management of the margin under the EU Own Resources ceiling, including the redemption profile of the EU bonds. The refinancing operations are expected to take place from 2016 and all costs incurred by the EU in concluding and carrying out each operation will be borne by Portugal.

It should be noted that this decision also aims at improving borrowing conditions for the sovereign as well as generating positive spill-over effects for the private sector. These effects are beneficial for both creditor and debtor countries and therefore contribute to the stability of the euro area.

Taking into account the above factors, the Commission considers that the changes consisting in the extension of the average maturity of the EFSM loan to Portugal are conducive to securing the programme's objectives.

EUR-Lex: COM(2013)330: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:330:FIN

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